The U.S. Federal Reserve System buys $10 m

问题单项选择题

The U.S. Federal Reserve System buys $10 million of government securities from the public, the reserve requirement is 20 percent, and all banks have zero excess reserves. A few weeks later, if no excess reserves still exist, the total impact of this action on the money supply will be a:（）

A. $ 50 million increase.

B. $ 2 million increase.

C. $ 2 million decrease.

答案

参考答案：A

解析：

(1) The FED increases the money supply by buying securities. (2) There are no excess reserves so there was a maximum expansion. (3) ( New Reserves in system) / ( Reserve requirement = Money created (10/0.2)=$ 50.